​T+1 And The Global Race To Build The Next Generation Of Market Infrastructure

The T+1 settlement cycle—where allocations, affirmations, funding, reconciliation and settlement must all happen within a single business day—will soon become the global standard. This transition presents firms with a critical opportunity to modernize their operations while preparing for the next phase of market evolution.

Research commissioned by Tokenovate reveals a significant gap between expectations and readiness. While 83% of U.K. post-trade professionals expect their firms to meet the October 2027 deadline, only 32% currently describe themselves as fully prepared. This operational disconnect suggests many firms may be underestimating the complexity of the transition.

U.S. Transition Lessons

The U.S. experience offers valuable insights into what can be achieved and the potential pitfalls of inadequate preparation. Following the move to T+1, almost 95% of transactions met same-day affirmation criteria, compared with 73% at the start of 2024. The NSCC Clearing Fund also fell by an average of $3 billion, or 23%, with settlement failure rates remaining broadly consistent with pre-change levels.

However, the U.K.'s Investment Association noted that some U.S. firms initially responded by adding headcount and implementing manual workarounds that have proven difficult to unwind. Without greater automation, these operational costs could persist as markets move toward faster, more continuous settlement.

Building Interoperability

As markets become more diverse, with traditional and digital assets coexisting across different settlement systems, the need for interoperability grows increasingly critical. ESMA's new T+1 framework reinforces the need for more consistent, standardized communication between firms.

Common standards such as the FINOS Common Domain Model provide a shared representation of financial products, transactions and key events throughout their life cycle, reducing the need to reinterpret trades as they move between systems. Legal meaning must also travel with the data, ensuring that ownership transfers, obligation discharges and settlement finality remain tied to appropriate legal agreements and official records.

Global Infrastructure Shifts

Settlement infrastructure is already undergoing significant transformation worldwide. In September 2026, the Eurosystem launched Pontes, allowing wholesale transactions in tokenized assets to settle in central bank money. Meanwhile, in the U.S., DTCC has been advancing tokenized securities and settlement capabilities across Treasurys, equities and delivery-versus-payment systems.

Project Agorá is exploring how different forms of central and commercial bank money could work together to support more coordinated cross-border settlement. These developments indicate that digital assets are becoming more closely connected with the infrastructure at the heart of regulated markets, requiring greater coordination between assets, money and their associated obligations.

U.K. as Test Case

The U.K. is positioning itself as a test case for the next phase of market infrastructure development. The Wholesale Digital Markets Champion's first report placed end-to-end repo among its priorities, providing a practical test of whether U.K. digital market infrastructure can support the full transaction life cycle.

Research suggests the industry anticipates widespread T+0 or atomic settlement within 3.7 years. The path will vary across asset classes, but faster settlement demands much closer coordination between cash, assets and contractual obligations. The transition to T+1 gives firms a reason to build those capabilities now, potentially allowing the U.K. to set the standard for how markets globally navigate financial modernization.